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Thursday, March 3, 2011

CSCO Slide Continues to $14

CSCO Charts are not looking good. Since Stock Peaked in April 2010 @ $27.74, stock has smoothly glided down to current levels of $18.50, for a loss of 33% lagging tech heavy Nasdaq composite by 40%+. If the trend doesn't reverse in positive direction soon, stock could fall to $14 levels this year.


Here is quick analysis on product side of CSCO-->
Strengths:
• CSCO dominates data networking in enterprise segments with end-to-end solutions offering TCO (total cost of ownership) advantage over competition.
• CSCO has constantly invested in new technologies offering new revenue stream opportunities (Billions $) in 6 prominent growth segments – Security, VoIP, WLAN, Optical, Home Networking, Storage.
Concerns:
• Enterprise data networking market growth is slowing due to segment saturation & overcapacity.
• New technology segments are still to small to have any significant impact on current revenues.
• CSCO is losing market share to HP, Juniper, Fortinet, Palo Netowrks due to increased competition and channel conflicts in server market.
• Asian vendors from China are bringing in increased pricing pressure.
• CSCO continues to acquire large number of companies and as CSCO workforce grows, its posing increasing integration challenges.

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